European startups building alternatives to Nvidia’s GPUs are lining up nine-figure funding rounds to ride the AI boom, with Dutch firm Euclyd seeking at least €100 million as it touts major power-efficiency gains for inference. UK-based Optalysys, Britain’s Fractile, and France’s Arago are also targeting large raises, while Axelera and Olix have already drawn more than $200 million this year. Investors cite geopolitics, U.S. export controls, and reliance on TSMC as catalysts for Europe’s push toward “sovereign compute.” Yet Europe’s smaller foundry base, longer chip development cycles, and limited government demand pose headwinds, and funding still trails the U.S. by a wide margin. Startups are betting on novel architectures—including photonics—to curb heat and power costs as inference overtakes training in workloads. Nvidia continues to press its advantage with heavy R&D spending and dealmaking, underscoring a race to redefine AI infrastructure economics.
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Silicon photonics
Graphics processing unit
Nvidia
European Chips Act
